Tuesday, December 9, 2008

Why are the “brains” of this world constantly redefining the problem? We know what the problem is, why don’t we come up with concrete proposals.

The problem is the banks, which were given in excess of $100 billion in Taxpayers money but are still not willing or able to help. $100 billion in Cash assets theoretically creates $1 trillion in credit, assuming a 10 to 1 leverage ratio; they were leveraged at 30 to 1!

Why are they not lending? Are their assets worth less than we thought and the money given them not sufficient to balance their books? Are they using that money to de-leverage? Or are they spending it on the wrong things? They are still paying out dividends and handing out bonuses!

On the other hand they are collecting up to 22% interest on credit card debt and over 7% on mortgages when the cost of money is less than 1%!

Whatever the problem, these traditional and apparently “failed” banks are not functioning and perhaps require a little encouragement by providing them with some competition.

The government should form 10 or more state banks with $100 billion or more of taxpayer’s money and make the Taxpayer stockholders of these banks, not the government, by issuing stock certificates in these new banks to each taxpayer.

The $100 billion or more would create credit facilities of roughly $1 trillion or more at a leverage ratio of 10 to 1 and would immediately unfreeze the credit markets.

These banks could lend to the auto industry amongst other things and take that monkey of the government’s back.

The taxpayer should receive a stock certificate in each of these banks. The banks would be run by reputable individuals including retirees; this would create employment.

The banks survival would be guaranteed by the government for a determined amount of time, say three years.

After a certain amount of time, say five years, these banks would be returned to the market through an IPO and capitalism would be restored and the taxpayers holding the stock certificates would get their money back and most probably make a decent profit.

This proposal has the following advantages and does the following things;

1)- Create new and competitive financial institutions that are not too big to fail and continue the mantra of creative destruction.2)- Immediately unfreeze the credit markets and provide $1 Trillion or more in credit facilities and perhaps help the American automakers.3)- Provide banking jobs to thousands of people.4)- Maintain the capitalist system by providing the taxpayers with stock certificates and thus create oversight by taxpayers and not government.5)- Ensure a return to the taxpayer by spinning these banks back to the open market through an IPO.

I realize this proposal is controversial and out of the box, but I firmly believe it is feasible and would be more effective than the current solutions of pouring good money after bad.

Alternatively Lets start our own PEOPLES' BANK

Thank you for providing this platform and look forward to your comments and or your support.

Tuesday, December 2, 2008

Ford and GM are still two of the world’s largest and most successful automakers. They make and sell cars all over the world not just in the USA!

They do make good and reliable cars and have beaten foreign makes in quality and durability.

They do make Hybrids, the Ford Escape has been around before the Toyota Prius and more of the big three are launching new hybrids like the 60 MPG Ford F150.

They do not only make gas guzzlers, I drove a Ford Fiesta in Europe that did 65 miles to the gallon and there are US models like the Focus that are well above the average in miles per gallon.

They do make cars that Americans want. Unfortunately the American market wants large gas guzzlers like the SUV's. Every automaker in the world has been trying to bring successful SUV's to the American Market.

The government is blaming the big three for making cars that the market wants! This is what a capitalistic corporation is supposed to do; sell cars that people want and make a profit doing it!It is true that the cost per automobile is too high, I am not sure though that the cost comparisons to foreign car makers is not an exercise in comparing apples and oranges.

Social costs of foreign labor are measured differently. Most foreign manufacturers have a government taking care of health care costs and pensions which are paid for by the taxpayer. The big three are all carrying the full burden of these costs (health care and pensions) that in most other countries are carried by the government.

The current problem of the big three is exacerbated by the current financial crisis. Credit is tight, it is hard for them to rollover/renew their credit lines and their ability to raise new capital has been greatly diminished by the precipitous decline in their share price.

The problems of the Detroit three is not a lack good, quality or fuel efficient cars that the people want, it is their burden of taking good care of their current and past employees and the current economic crisis; the government should help them.

Saturday, November 29, 2008

There are derivatives and derivatives, most are clever instruments that are extremely efficient in generating leverage and spreading risk. It is in the way in which some of them were used that created the financial crisis. Credit Default Swaps CDF’s: Stupidity is issuing Credit Default Swaps insurance without setting aside any reserves.Greed is accepting fees and payments for them without doing anything to legitimize their existence.Stupidity is entirely relying on ratings and still not setting aside reserves to cover the risk of defaults.Greed is allowing parties unrelated to a transaction to place side bets on defaults in order to receive fees and payments. As a result of not setting aside reserves more CDF’s were issued than the issuers could possibly cover. The taxpayers are now funding the liabilities of the issuers of these CDF’s (AIG and others) because the insurers were too greedy for fees and too stupid to set aside reserves when they should and could have.

Collateralized Debt Obligations CDO’s: Stupidity is not balancing a portfolio by combining low risk/low interest CDO’s with high risk/high interest CDO’s.Greed is having only high risk/high interest CDO’s to maximize returns without regard to the potential exposure of being wiped out. As a result of this greed and stupidity the banks are holding worthless high risk/high interest CDO’s that have caused them to be greatly over leveraged and unable to lend. The taxpayers are now funding the Banks that were overexposed to these worthless CDO’s because the banks were too greedy and too stupid to maintain a balanced portfolio of low risk/ low interest CDO’s. So instead of behaving like rational prudent human beings, the management or guardians of our financial system were driven by greed and stupidity. Instead of treating one of the greatest inventions of our time, derivatives, responsibly and with care to expand credit and the economy, they instead turned them into a lethal weapon that changed a simple financial problem into a global nightmare.

What are Collateralized Debt Obligations, CDO’s ?

The instruments or Derivatives that were used to bundle mortgages issued by banks to homeowners are called Collateralized Debt Obligations (CDO’s). These CDO’s were resold to other financial institutions to finance additional lending or issue more mortgages. Each CDO was divided into roughly three slices or coupons. Coupon#1 was the safest guaranteed/low risk and thus carried a relatively low interest rate e.g. 5%, Coupon #2 was not entirely covered, held more risk but carried a higher interest rate e.g. 7% and the Coupon #3 was high risk and thus carried the highest 11% to 13% interest rate. In case of any default or shortfall, holders of Coupon #1were the first to get paid and any surplus went first to coupon #2 and last to Coupon #3. Therefore, if any trouble or shortfall occurred the first coupon holders to get wiped out were those holding Coupon #3. One of two things happened Coupons #1 and #2 were easily sold to prudent investors and the banks got stuck with coupon #3 or the banks were so greedy that they held on to coupon #3 because it had the greatest payout even though it carried the highest risk.

During Mr. Greenspan’s testimony before congress a couple of weeks ago he acknowledged that he had made one mistake.

He had assumed that the corporate “Elite” in charge of governance of our corporations, would behave with integrity and fulfill their duties with the honor deserving of the trust the rest of us, including himself, had invested in those who held the highest of corporate offices.

We can discuss the problem of using the word “assume” for ever but as we all know many people interpret it to mean “assume makes an ass of u and me” which is of course exactly what has happened.

However, the discussion here is whether Mr. Greenspan had good reasons to make the assumption about integrity when he did or not.

Around the 1980’s, the Foreign Corrupt Practices Act and its requirements for compliance forced corporations to clean up their “act” in terms of ethics and code of conduct.

Since then a new wave of other management techniques, mainly to cope with a myriad of social legislation (e.g. equal opportunity, diversity, sexual harassment, etc.) gave birth to the Vision, Mission, and Code of Conduct statements which turned up on a mostly voluntary basis in the more forward looking organizations.

It took until the post Enron/Worldcom era Sarbanes Oxly (SOX) legislation to make having these Vision, Mission and Ethics/Code of Conduct statements almost compulsory as evidence of the “tone at the top”

The problem with all these expressions of desired behavior was that they were just that, expressions of desired behavior. Agreed many companies trained their employees with lengthy and numerous training sessions, and management was encouraged to give these statements endless lip service, but with some minor exceptions nothing really changed especially not in the top echelon of the corporation. Top management rarely walked the talk.

Evidence the continued raping of the corporations and by default the shareholders with outrageous executive compensation, the blatant cheating by secretly backdating options, the petty thefts committed by executives on expense reports which ensured that hardly any private expense of the executive remained unpaid by claiming it as an entitlement or fringe benefit.

The reason why most people in high offices behave this way is because being in a high and powerful office is a new experience to them. Even though there are guidelines of how to behave with integrity and honor, it is not part of their DNA. There is no “noblesse oblige” mentality in their make up. They have worked hard to get to a position that they had no reasonable expectation to get to so they are “worth it”, they deserve everything they can get. It is difficult to deal with power responsibly if you have never been close to it or have never personally experienced it before.

Many fresh new executives have had no role model, no father who was in a high level position of power, whom they could have learned from at an early age, who they saw agonizing over difficult decisions he had to make which had major implications for a community, what it was like to be responsible for a large number of people, other than his immediate family’s, lively hood, how they had to be an example in their community and had to continue to earn their trust and confidence and so on.

Being taught by ones parents how to behave and conduct oneself in a position of power vis a vis ones servants thus learning how to treat them with respect, dignity and care is another example of learning at an early age that power demands duty and a sense of responsibility.

These are all things that shape an individual leader’s DNA. Admittedly it sounds like the preaching’s of an old era that is outdated and cannot work in a meritocracy. Therefore to assume that “noblesse oblige” is the M. O. in every high level executive is an unreasonable expectation. To expect that the ethics and self governance in the highest offices of the land are a substitute for sensible regulation and legislation is naïve and old fashioned to say the least. In this modern world omissions of a sense of duty and responsibility in some individuals can have global implications on the lives of millions of people.

Business is not just Business, it goes beyond the egotistical compensation and self help interests of the executives. Business is a serious undertaking; it carries with it responsibilities and duties to a broader community, it affects other peoples livelihoods and not only just those that work for the business, it affects whole communities, and as we have recently discovered, it affects the entire world.

Thursday, August 14, 2008

We are all suffering from the current downturn in the Economy and most people are trying to tighten their belts by economizing on the two things they should not economize on and those are health and food. Many of us boomers are also approaching our retirement where we have got to get used to live of fixed incomes and try and cut costs.

The following is a sampling of all my suggestions I wrote about in my various blogs where we can economize without resorting to scrimping on health or food.

Telecommunications:

- Telephone; LandlinesDo you have a traditional landline costing you $60 per month at least, including Long Distance?Did you know you can get a landline for $25 per month with Voice over IP (VOIP)? If you have a DSL or Cable internet connection you can get VOIP. T-Mobile can even offer this service for your mobile phone from home for only $10 per month if you do not need international. That is a savings of between $35 and $50 per month!

- Telephone; Mobile PhonesAre you on a post pay plan that costs you at least $60 per month with tons of free minutes that you never use and where you are constantly cut off? Did you know that you can get pre pay or pay as you go plans for as little as $10 per month? If you use your mobile phone for texting or SMS only, this money can last you for longer than a month and your message always arrives! You can also fill it up with higher amounts if you need to but my average spend is less than $25 per month. So here is another saving of between $35 and $50 per month; the messages can be as long as you want to make them!

- High Speed Internet connectionHave you refreshed your Internet service contract lately? Are you paying nearly $ 65 per month for DSL or Cable service? Check out all the offers and threaten your service provider with changing to another provider, and watch how quickly your charges will be reduced to $25. Another savings of $40 per month.

- Cable TVDo you really need 100 to 200 channels? Do you really benefit from your $90 per month? How often do you use your DVR? Do you not have a VCR or a DVD recorder which can perform almost the same functions? Also, is it not true that most of the programs (sport, series, funnies) us boomers watch are on the national channels for free? Buy some rabbit ears for $20 from Radio Shack, put them on your roof , tune them correctly and attach them to your cable wiring. You now have all the TV you need in picture perfect HD for free! Saving your self another $90 per month.

So by simply going through your everyday communications needs and paring them down to what you need, without sacrificing anything, we have just saved ourselves the grand total of between $200 and $230 per month.

Just imagine what that can buy you in quality food and health care in a month. And you aint seen nothing yet!

The next episode I will discuss, savings on ELECTRICITY, use of your CAR and CAR PAYMENTS, your HOUSE and MORTGAGE PAYMENTS and so on

Sunday, August 3, 2008

As Anthony Ingram wrote in a letter to the editor of The Dallas Morning Post on July 30th.

"The Resident benefits from lower or zero Electric bills. The Electricity Company benefits from having small inexpensive power generating sites with minor maintenance. The community benefits by additional generation without major power plants. Everybody wins, except wind generation producers."

This clearly is an alternative way to add clean capacity to our power generating capability without adding new power stations. Imagine thousands of green mini-power stations that feed power to the grid and make your energy needs virtually free of charge.

This method of generating power, helps our country, saves the environment and helps the consumer with reduced or zero energy prices. No need for expensive wind farms, no need for new or enhanced grids to transport the energy from the farms to the existing grid costing billions of dollars. Believe me the grid between our homes and the utility company exists TODAY. The Technology exists and works TODAY!

As it is too expensive for most ordinary households to install, even with a 50% subsidy and a $7,000 tax credit, why not have the utility company install the panels and pay for it? They are going to spend money on new and additional green energy generation capacity anyway!

As a payback on their investment the utility company will not have to pay the resident for any electricity the panels on their homes return back to the grid, (believe it or not the meters on your residence will start spinning backwards and put electricity back into the grid when your home generates more electricity than it requires) until the cost of the panels and the installation is paid off.

If all this sounds implausible, it is not. “A proposal for $6.4bn of new power lines linking new wind farms with Texas’ public electricity grid, whose cost will be borne mainly by consumers”. Not my words, see article in my links.

See how many houses could be equipped with solar panels with this money. The gross cost for an average but complete solar panel installation is roughly $35,000. So for $6.4 billion roughly 200,000 houses could be provided with solar panels that will feed the grid.

I have not even discussed the amount of money a Texas utility is about to spend to increase its capacity with green power sources! How many more homes could be equipped with these huge amounts of money.

I invite you all in joining me to call for a energy solution that is a win win for all. And vote for power to the people.

When you surf the Internet for retirement options, the possibility of retiring on a cruise ship seems to be popping up more and more often the closer we get to the time that boomers are going to retire.

The benefits of retiring on a cruise ship are eloquently described everywhere and generally well known. It is also clear that retirement for the rich retirees is generally well catered for through expensive world cruises and floating apartment complexes. As ever if one has the money most things are possible.

The subject of this article is about how to make retiring on a cruise ship of a regular cruise line affordable, flexible and convenient for the person of average means.

The focus here is on retiring on a commercial cruise line because dedicated floating retirement homes will most probably be too expensive. Not only that, but it will take the charm of meeting different people of various ages on a day to day basis and the constant change in entertainment and itineraries out of the success formula, both of which are clearly part of the secrets to staying young and energetic.

That given, let me list some of the things that could make retiring on a cruise ship a costly, inflexible and at times an inconvenient experience for those of us who are not wealthy.

Start with the cost; Most of us will retire with probably $2,000 to $5,000 per month in retirement money. We will focus at the lower end of the bracket $2,000 and see if we can make this work.

Some of the cruise lines will offer an interior/inside stateroom/cabin for roughly $60 per day per person if you book last minute. Also if you book last minute one could potentially get this for one single person. If you are a repeat customer they might even upgrade you or give you a further discount. This translates to $1,860 per month. So on a $2,000 per month budget you would only have $140 per month left. Not very much, but doable. In addition If you only have $2000 per month you can only afford itineraries that are 30 days or less, doable but tricky.

The important thing here is you need to find a way to constantly book last minute in order to keep you rate affordable and find itineraries of 30 days or less to remain within your budget.

There are other things to consider.

First; you have to get to the ship, which can be cheap if you live in Miami, FT Lauderdale, Tampa, Port Everglades, Vancouver, Los Angeles, San Francisco or any of the other ports that cruise lines use as their embarkation points. Most of us though do not live by these ports and will have to fly. So that needs to be added to at least the initial cost.

Second; you need to be able to remain on the same ship as long as possible to make it convenient and avoid further transportation costs to another port to continue your journey. The way the airfares are moving this is inconvenient and not a very cheap proposition that would put this lifestyle out of your reach with a limited budget. An alternative is that you switch to another ship at the same port on the same day, sometimes unavoidable but still inconvenient.

The takeaway here is that you need to pick your itineraries and cruise lines with precision and good timing in order to avoid the inconvenience of moving ship and/or incurring unwanted transportation costs.

Now would it not be nice if there was some sort of body with members, a Union, which took care of all these details for you. A Union that you could join free of charge and that had such a strength in numbers it could get affordable pricing, convenient itineraries and flexibility to help your dream come true?

I am attempting to put together precisely such a group that will negotiate such pricing for you, have strength in numbers to make it flexible reliable for you to live aboard cruise liners without worrying about the details and so on.

The Union of members will negotiate: • Affordable pricing,• Flexible payment terms, so that you could go on longer itineraries without having to pay for the entire itinerary up front,• Coordinated and contiguous itineraries, that will maximize your live aboard on the same ship and make swaps as convenient as possible and keep transportation cost to a minimum,• Provide on shore facilities at major departure ports• Provide umbrella health insurance for members

Please come and join us at http://cruisingthruretirement.blogspot.com free of charge so that we can build one of the most powerful unions of retirees’ and soon to be retirees’ in order to make retiring on a cruise ship a reality for all.

This is important as these ports are the key to our convenience strategy to be able to LiveAboard cruise-liners long term and keep transfers between ships to a minimum, perferably none.On my website Xpdatravel I have put together cruise iteneraries from two months to one year where the LiveAboard does not have to leave their ship at all.

To achieve this the LiveAboard sometimes has to put up with some repetitive itineraries. Although seeing Athens or Rome four times/days over a two month period is not a high price to pay for the convenience of the LiveAboard to be able stay on the ship and not to have to incur travel expenses to go to another port or change ship.

Come and join us so we can work dillegently to make the LiveAboard dream come true and vist us at CRUISINGTHRURETIREMENT to and make us stronger or send me an e-mail Bou@xpdatravel.com expressing your interest.

Many, many people in Rockwall, Texas have golf carts. They ride around in them in their gated communities . Why not drive around in them in their small towns? Would that not be the perfect solution to some of our energy and environmental needs? Besides the bicicle and just plain walking golf carts are probably the most environmentally friendly and energy efficient way of going about ones local business.

Before long, the canvas-covered, open-sided carts may be less of a surprise on the streets, such as those of Pine Lawn, Missouri, a working-class suburb of St Louis.

Under pressure from rising fuel prices, towns across the United States are passing bylaws to permit the use of golf carts on their streets as an alternative to cars for ordinary citizens. "You can definitely save on gas - my cart's electric, but even the ones that run on gas hardly use any of it," said Paul Heideman, mayor of Ashkum, a town in rural Illinois.

Numerous other towns in Illinois, Indiana and North Carolina have implemented similar regulations or are considering them. And in several places where the carts are an increasingly common sight, another benefit is becoming clear: with no windows or doors to separate drivers from each other, or from pedestrians, the texture of daily life is changing. "It leads to a friendlier atmosphere," Heideman said.

Why does'nt a small town like Rocwall in Texas make golf-carts lawful street vehicles? Paul the owner of East Texas Colf Cars who runs a golf-cart business should be lobbying hard to get this done.

Golf carts have a serious image problem, however: many people associate them with old age and pensioners . But with the help of East Texas Golf Cars in Rockwall carts can be kitted out with chrome wheels, leather seats and high-end gadgetry - an effect slightly marred by the legal requirement to display a sign declaring that the cart is a slow-moving vehicle.

The potential for savings on fuel is huge and the carts are an ideal solution for those worst hit by the current economic downturn: a basic vehicle costs around $2,000. You have to be careful though as the risk of injury is higher than in a regular car.

Despite its limitations, though, Jones said they had transformed the job of policing Pine Lawn. "Now people can talk to them [officers] more easily," he said.

Saturday, January 12, 2008

I know this sounds funny, but do your self a favor and check what channels you all really watch at home.

Ignore what channels you need at work or what your kids want to look at. What channels do you or your wife really view at home?

Do you watch the popular programs? Like Sixty Minutes, Desperate Housewives, NFL Football, Basketball, Baseball, Playoffs, Boston Legal, PBS, Lost, Grey’s Anatomy, CSI, Law and Order, Dirty Sexy Money, 20/20, House, The Late night Shows, Leno and Letterman and so on and so forth.

All of these are aired on network TV and are free and in HDTV, if you want them to be.

All you have to do is get yourself a rabbit ears type antenna from any Tech Store and connect it to your cable wiring, so it distributes the signal to your entire home.

How do I know this?

We are Baby Boomers and recently moved from an Apartment to a Townhouse down the road at Chandlers Landing. We had AT&T Uverse in our apartment, but when we moved we were told that Uverse was not available at the Townhouse.

We had a small TV in the kitchen of the General Electric variety with rabbit ears the reception of which was perfect in both our Apartment and in the Town House down the road for about 20 channels.

So in some casual banter my significant other observed that it was a shame that we could not get as perfect a reception on our other TV’s (without having cable or satellite) as the one we were getting from our kitchen TV for FREE!

I thought this was a great idea and I started to investigate to see if I could satisfy my significant other’s ambition. I knew that if I could find some sort of contraption that could receive a TV transmission signal that I could attach to our cable distribution cables, I could get it done, and went to shop for one.

We had a dish on our roof so I immediately thought that if I could find a dish like contraption/receiver that could perform a similar function and would receive a TV signal from a tower instead of a satellite or a cable and connect it to our Dish TV wiring I could distribute it to the home.

The dish was only a partial success and I returned it to the store and exchanged it for an indoor aerial with rabbit ears. I anchored that aerial on the roof and connected it to the wiring to transmit it to the entire house.

In order to protect it from the elements I wrapped it in a plastic freezer bag, pierced the bag to allow the rabbit ears to be deployed and mounted it on the roof.

We have watched TV for free ever since with a picture (HDTV) perfect screen including those transmissions that were supposed to be on cable but were transmitted on local channels due to their importance to the local community.

Why don’t you join us and watch TV that is paid for by the commercials and return to the good old days when TV was free.